Health Care Coverage: Job Lock and the Potential Impact of the Patient Protection and Affordable Care Act
What GAO Found
Empirical research generally indicates that certain types of workers are more likely to remain in jobs they would otherwise leave in order to keep their employer-sponsored health care coverage, although research does not allow for a definitive answer on the prevalence or implications of this phenomenon for the overall labor market. The studies we reviewed generally found those workers who rely on their employer-sponsored health benefits are less likely to change jobs, leave the labor market, become self-employed, or retire when eligible, compared to those who have access to alternative sources of coverage. For example, one study found men with employer coverage were about 23 percent less likely to leave a job compared to those who also had access to coverage through a spouse.
In addition, some research found that this job lock phenomenon may be particularly acute for individuals with certain preexisting health conditions. However, because the study results and approaches used differ widely, it is difficult to quantify the overall prevalence of job lock based on those results. For example, the research examines a wide range of different populations and uses various definitions of job lock. Regarding labor market impact, the research we reviewed provides little empirical basis for assessing the aggregate labor market implications of job lock. This may not be surprising given the difficulty of designing research to address the variant ways job lock can affect different populations and account for the direct and indirect ways job lock could affect the labor market and economy.
The majority of Americansabout 55 percent in 2010rely on employer-sponsored health care coverage, which is largely subsidized by most employers and thus less costly to employees than coverage purchased by individuals on their own. Although a valued employee benefit, many believe that having health coverage tied to employment can influence workers to stay in jobs they might otherwise leave, a phenomenon generally known as job lock. The Patient Protection and Affordable Care Act (PPACA), enacted in 2010,
includes provisions that are designed to increase the accessibility and affordability of health coverage, particularly for individuals with preexisting health conditions. PPACA implementation is phased; though some provisions went into effect during the year of enactment, many provisions are scheduled to take effect in 2014. Some suggest that one benefit of PPACA may be a decrease in the occurrence of job lock. You asked us to examine job lock and the specific ways PPACA may affect it. Accordingly, we examined two key questions:
1. What has research shown about whether and the extent to which workers stay in jobs they might otherwise leave out of fear of losing health care coverage and the impact of those decisions on the labor market?
2. What are expert views on the ability of PPACA to mitigate job lock?